Paying for Safety: Preferences for Mortality Risk Reductions on Alpine Roads

36 Pages Posted: 4 Nov 2009

See all articles by Christoph M. Rheinberger

Christoph M. Rheinberger

WSL Institute for Snow and Avalanche Research SLF; CHDS

Date Written: November 4, 2009

Abstract

This paper presents a choice experiment, which values reductions in mortality risk on Alpine roads. These roads are on one hand threatened by common road hazards, on the other hand they are also endangered by natural hazards such as avalanches and rockfalls. Drawing on choice data from frequently exposed and barely exposed respondents, we are not only able to estimate the VSL but to explore how the respondents differ in their individual willingness-to-pay depending on personal characteristics. To address heterogeneity in preferences for risk reduction, we use a non-linear conditional logit model with interaction effects. The best estimate of the VSL in the context of fatal accidents on Alpine roads is in the range of €4.9–5.4 million with distinct differences between the urban and the mountain sample groups. We find the VSL to be significantly altered by socio-economic factors but only marginally altered by the type of hazard.

Keywords: Value of Statistical Life, Choice Experiment, Natural Hazard Mitigation, Traffic

JEL Classification: D81, J17, R42

Suggested Citation

Rheinberger, Christoph M. and Rheinberger, Christoph M., Paying for Safety: Preferences for Mortality Risk Reductions on Alpine Roads (November 4, 2009). FEEM Working Paper No. 77.2009, Available at SSRN: https://ssrn.com/abstract=1499682 or http://dx.doi.org/10.2139/ssrn.1499682

Christoph M. Rheinberger (Contact Author)

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